How China Became the Largest Branded Coffee Shop Market

China has passed the United States to hold the most branded coffee shops in the world, according to World Coffee Portal's latest annual report on the East Asian coffee market. China's total reached 49,691 shops, up 58% year on year, while the United States grew 4% to 40,062. East Asia overall holds roughly 120,000 shops, with China accounting for more than 40%.

Domestic chains drove the expansion. Luckin Coffee and Cotti Coffee added more than 11,000 net new stores combined over the year. The report covers 18 East Asian countries and drew on over 300 industry consultations plus more than 4,000 consumer surveys. One in five surveyed Chinese consumers visits a coffee shop daily, and convenience-focused small stores now dominate the market, pressuring established international coffee brands.

The latest annual report on the East Asian coffee market shows that China has surpassed the United States to become the country with the most branded coffee shops in the world. Over the past year, China's total number of coffee shops reached 49,691, a year-on-year increase of 58%, far exceeding the growth rate of the United States. This growth was mainly driven by domestic chain brands such as Luckin Coffee and Cotti Coffee, which together added more than 11,000 net new stores. At the same time, other East Asian markets such as Malaysia and the Philippines also showed double-digit growth, and Asian domestic chain brands are gradually going international, shaking the position of traditional giants such as Starbucks. The report points out that Chinese consumers' enthusiasm for coffee continues to heat up, with 20% of respondents visiting coffee shops every day, and convenience-oriented small stores have become mainstream. Front Street will also continue to follow this rapidly evolving coffee landscape for you.

World Coffee Portal, a research institution under Allegra Group, recently released the latest annual report on the East Asian coffee market. The report points out that China has already surpassed the United States to become the country with the most branded coffee shops in the world.

The total number of coffee shops in East Asia is about 120,000, of which China accounts for more than 40%, making it East Asia's largest and fastest-growing coffee retail market. Over the past year, China's total number of coffee shops reached 49,691, a year-on-year increase of 58%; during the same period, the United States grew by only 4%, with 40,062 branded coffee shops.

The report covers 18 East Asian countries, and the research team collected more than 300 surveys and consultations with industry leaders, more than 4,000 Chinese- and English-language consumer surveys, as well as on-site data and desk research. The report shows that 20% of surveyed Chinese consumers visit coffee shops every day, highlighting the positive role of coffee shops in driving coffee consumption in China. Small stores focused on convenience are very common in China's branded coffee market.

The growth in the number of coffee shops in China was mainly driven by the chain brands Luckin Coffee and Cotti Coffee. Over the past year, these two domestic chain brands expanded rapidly, adding 5,059 and 6,004 stores respectively, for a combined net increase of more than 11,000. Founded only six years ago, Luckin Coffee has 13,273 stores in China, making it the largest operator at present.

Starbucks opened its first store in China in 1999 and added 785 stores in 2023, bringing its total to 6,806. At present, Starbucks is East Asia's largest coffee chain brand, with more than 13,500 stores in 15 countries.

Over the past 12 months, 6 of East Asia's 10 largest coffee markets achieved double-digit store growth. On the list of the fastest-growing markets, China is followed by Malaysia (growth of 28%) and the Philippines (15.3%).

As East Asia's branded coffee shop market becomes increasingly mature, more and more operators are seeking international growth opportunities, and coffee chains from Asia are becoming increasingly prominent. The market share of domestic brands such as South Korea's Mega Coffee, Indonesia's Tomoro Coffee, and Malaysia's Zus Coffee is increasing. Cotti Coffee has already entered countries such as South Korea and Indonesia, and Luckin, Kopi Kenangan, and Compose Coffee have also opened international stores. The global expansion of these companies is shaking Starbucks' dominant position.

Jeffrey Young, CEO of Allegra Group, said in a statement: "Led by the astonishing expansion in the number of coffee shops in China, the East Asian market is clearly experiencing rapid growth. China has quickly become a global coffee power."

The above content is compiled by CoffeeHunters, a coffee news website.